Local Government: Finance

Baroness Hanham: To help tackle the deficit left by the last Administration, in the recent Spending Round, the Coalition Government set out a saving of 2.3 per cent for 2015-16 in overall local government spending, including funding from central government, business rates and council tax income. This change is balanced with a progressive package of measures which create a real opportunity to transform local services and help deliver better outcomes for less. The package includes:
	• A £3.8 billion pool of funding for integrated health and social care. This will help to ensure that service levels in the care and support system can be protected and to enable you to invest in prevention and early intervention;• A new fund of £330 million for transforming services. This will comprise a £200 million extension of the Troubled Families programme to support another 400,000 families, £100 million to enable efficiencies in service delivery, and a £30 million revenue fund plus a £45 million capital fund to drive transformational change in the Fire and Rescue Service; • A joint programme with the Department for Education on reviewing pressures in children’s services;• Flexibility to use capital receipts from asset sales to fund one-off revenue costs of reforming services; and• Support for two further council tax freezes in 2014-15 and 2015-16, to complement the existing three year freeze which has help cut council tax in real terms by almost 10 per cent.
	We have already introduced, in April 2013, a new business rates retention scheme for local authorities in England, which gives councils, for the first time, a strong financial incentive to promote local business growth whilst ensuring that they have adequate resources to provide services to local people. By enabling local authorities to retain a proportion of locally collected business rates to help fund the services they provide, we have created a direct link between business rates collected and local authority income, reducing local authorities' dependency on central government grants.
	Technical consultation on the Local Government Finance settlement
	Within this context, my Department is today publishing a consultation document setting out proposals for a number of technical changes that will apply to the Local Government Finance settlements for 2014-15 and 2015-16. It principally sets out approaches to holdbacks in 2014-15 and 2015-16 required for the rates retention safety net, and, in 2014-15, for achieving the 1 per cent saving in local authority funding announced
	at Budget 2013. It also sets out how we propose in 2015-16 to achieve the changes in last month’s Spending Round through scaling back elements within Revenue Support Grant at differential rates.
	Later this year, we will put forward our proposals for local government funding for 2014-15 and 2015-16 to the usual Local Government Finance Settlement timetable.
	Technical consultation on the New Homes Bonus
	We are today also beginning a separate technical consultation on the New Homes Bonus. As announced in “Investing in Britain’s Future”, we are considering that in 2015-16 an amount from the New Homes Bonus will be pooled within Local Enterprise Partnership areas to support strategic, locally-led housing and economic development priorities. Pooling complements the duty to cooperate and the abolition of the top-down Regional Strategies introduced through the Localism Act. In particular, we hope it will encourage local authorities to work together on new developments which might cross council boundaries, and to help unlock the provision of cross-local authority infrastructure.
	Consultation on the use of capital receipts
	We have also published a consultation document on proposals for the use of capital receipts from asset sales to invest in reforming services. This follows the announcement in “Investing in Britain’s Future” that we would be consulting on these flexibilities. The consultation aims to gather opinion on the proposal to allow capital receipts from new asset sales to be used for one-off revenue purposes to stimulate organisational change. We want to assess whether this proposal is a realistic option to enable local government to reconfigure their service areas, to bring down their ongoing revenue costs and to deliver improved services.
	At the same time, a guidance note on the Policy and Procedure for Capitalisation in 2013-14 will also be published, setting out the timetable and procedure for local authorities wishing to apply for capitalisation directions in 2013-14.
	Publication of a revised Business Rates Retention Pooling Prospectus
	A revised Business Rates Retention Pooling Prospectus is also being made available. This updates and replaces the existing Prospectus and provides a timetable for the 2014-15 process.
	Consultation on property owners in Business Improvement Districts
	We have now launched a consultation on how the role of property owners can be formalised in Business Improvement Districts. We recognise that the role of landlords is crucial to the future success of our town centres and the consultation seeks views on a framework for allowing such schemes.
	Summary of responses to consultation on rents for high income social tenants
	We are also today publishing a summary of responses to our consultation on proposals to charge higher rents to social tenant households with high incomes. We wish to ensure best use is made of social housing, and that tenants with high incomes, who can afford to pay a fairer level of rent, do so. We intend to take steps
	towards removing the regulatory controls preventing private registered providers charging market rents to social tenant households on incomes of more than £60,000 per year; and will set out revised rent guidance for local authorities.
	Consultation on retained firefighters’ access to a pension scheme
	On 23 July, we announced a consultation to give eligible retained firefighters backdated access to pension benefits that are comparable to the now closed Firefighters’ Pension Scheme 1992. The consultation is taking steps to address a historic anomaly that discriminated against retained firefighters by excluding them from access to a pension scheme. Retained firefighters are employees and they perform an important role for their communities and the proposals will introduce a fair system that provides a level playing field for all firefighters.
	Copies of the consultation papers and associated documents have been placed in the Library of the House and on our departmental website.

Railways: Crossrail

Earl Attlee: I am pleased to inform the House that the Crossrail Sponsors (the Department for Transport and Transport for London) yesterday instructed Crossrail Limited to complete the Crossrail station at Woolwich. This instruction will allow the station at Woolwich to open alongside the rest of the central section of the Crossrail route, currently scheduled to happen in December 2018.
	My Rt Hon Friend Philip Hammond MP, the then Secretary of State for Transport, made a statement in February 2011 confirming that an agreement for building
	the station box at Woolwich had been finalised (16 February 2011, Column 88WS). Since then Berkeley Homes has proceeded with construction of the box, in line with that agreement. This work was completed ahead of schedule in March this year and the box has now been handed over to Crossrail Limited.
	Government had always made clear that completion of the station would be conditional upon receiving sufficient funding contributions from those developers and businesses that stand to benefit from a Crossrail station at Woolwich.
	The instruction to complete the station, therefore, follows the conclusion of an agreement to fund the fit-out works.
	Crossrail Limited is receiving fixed additional funding of £54m. This is made up of contributions from the Royal Borough of Greenwich, through local developer contributions and a grant from the Greater London Authority; Berkeley Homes, the site developer; and Transport for London, whose contribution will be repaid through the additional farebox revenue generated by the station.
	The remainder of the funding will be provided by Crossrail Limited. Crossrail Limited had made budgetary provision for works that were required to allow trains to run through the station box. This will be reallocated to the works required to complete the station.
	A fully operational station at Woolwich will support the regeneration of this part of South East London, supporting the local borough’s growth ambitions as well as significantly improving connectivity and access to job opportunities. It will also provide jobs during construction.
	Crossrail Limited will now begin the process of procuring the fit-out works and will be publishing an OJEU shortly.